Buying property is one of the biggest financial decisions most people make, and once you exchange contracts you are usually locked in. Doing your homework first, often called due diligence, means finding out as much as possible about a property, its risks, its legal status and its true cost before you commit. Here is what a careful purchaser should look at before signing.
What is due diligence?
Whether the property is residential, commercial, industrial, rural or mixed-use, a careful purchaser should carry out proper checks before exchanging contracts or becoming legally bound. In simple terms, due diligence means finding out as much as possible about the property, its risks, its legal status and its true cost before committing to the purchase.
Start with the contract and title
A prudent purchaser should first review the contract for sale and all attached documents. In New South Wales, this usually includes the title search, plan, planning certificate (sometimes called a zoning certificate), drainage diagram and other required documents.
The title search shows who owns the property and whether there are any mortgages, easements, covenants or restrictions affecting it. For example, an easement may allow a neighbour or an authority to use part of the land for access, drainage or services. A covenant may restrict what can be built on the property. These details can have a real effect on how you are able to use the land, so they are worth understanding before you proceed.
Check planning and zoning
Planning and zoning checks are also important. The local council zoning indicates what the land can be used for, such as residential, business, industrial or rural purposes. A purchaser should check whether their intended use is allowed. For example, a buyer wanting to run a warehouse or a childcare centre should not assume the property can legally be used for that purpose. Council records may also reveal development approvals, building notices, heritage restrictions, flood controls or bushfire controls.
Arrange the right inspections
Physical inspections are essential. For residential property, this usually includes a building inspection and a pest inspection. These reports may identify problems such as structural movement, water damage, termites, roof defects or unsafe wiring.
For commercial or industrial property, more specialised reports may be needed, including fire safety, asbestos, contamination, mechanical services, air-conditioning, lifts, drainage and electrical systems. Industrial land may require environmental investigations, especially if it has been used for chemicals, fuel, manufacturing or waste storage.
Confirm boundaries and access
A purchaser should also check boundaries and access. A survey can confirm whether buildings, fences, driveways or retaining walls are properly located within the property boundaries. This matters where there are shared driveways, laneways, encroachments or unclear fence lines, all of which can lead to disputes down the track.
Review strata documents
For strata property, the purchaser should obtain and review a strata inspection report. This may show the financial position of the owners corporation, past disputes, building defects, special levies, insurance and planned works. A unit that looks cheap can become expensive if major repairs or special levies are on the horizon.
Examine any lease
If the property is leased, the lease documents must be carefully checked. The purchaser should understand the rent, lease term, options to renew, outgoings, rent reviews, bonds, guarantees and any tenant disputes. For commercial property, the quality of the tenant and the reliability of the rental income are often central to the value of the property.
Do not overlook the financial checks
Other important checks include finance approval, stamp duty, GST, land tax, council rates, water rates, insurance and settlement adjustments. Purchasers should also confirm whether any fixtures, equipment or licences are included in the sale.
Why due diligence matters
Thorough due diligence helps a purchaser avoid costly surprises. It may also provide grounds to renegotiate the price, request repairs, require further documents, or decide not to proceed at all. The key point is simple: before buying, know exactly what is being purchased, what it can be used for, and what risks come with it. In other words, do not sign before you check the fine print.
How Complete Legal can help
Buyers across Western Sydney have trusted our firm with property purchases large and small. We know what to look for, and we work through each of these checks with you in plain English so you can move forward with confidence rather than crossed fingers.
This article is general information only and is current as at July 2026. It does not take your personal circumstances into account, and it is not legal advice. You should seek advice tailored to your situation.
If you are thinking about buying a property, get in touch to discuss your situation before you sign.
